Do not buy this rally!!  Once again we have a euphoric reaction to a news event.  Yes, the federal backstop of Fannie and Freddie will allow traders and economists to breathe a sigh of relief, but remember what I have been harping about since day one.  Unless and until investors buy stocks simply because they want to own them, this market is going nowhere.   This will not help the developing recessions overseas, it will not stem the growing tide of foreclosures, and this surely will not help the earnings of tech stocks, for example.  Hank Paulson has already come out and said that the government has no idea how much this is going to cost the taxayers.  Comforting.  Whenever the government gets involved in anything, the outcome is almost never good.

Believe it or not, we had advance warning of this bounce on Friday.  Below is a chart of the Nasdaq with its momentum oscillator in blue in the middle pane.  Notice how it held its August 25 low while prices broke their August 25 low.  That positive divergence said a bounce was due.  Nothing has changed fundamentally with this market.  Lower prices are ahead.